Mislead by Realtor

[UNCLEBUCK]

What is the name of your state?What is the name of your state?What is the name of your state?What is the name of your state?
Connecticut
[Note: Executor of Estate who is family member handled the following.]
Listed our family home with local Realtor. We already had an interested party we had spoken with before the listing agreement was signed, (who owns business property adjacent to ours) so Realtor agreed to accept him as an exclusion to the listing contract (3%commission if the excluded party bought property), otherwise 6% commission.
Offers were taken from several parties, however, the 'excluded' partie's bid was accepted as it was the highest offer. The buyer was 'brought in' by another agent, who works for the same company. No one ever dreamed this could happen as our listing agent had previously spoken to the 'excluded' party. The Company and listing agent are now claiming we owe them 6% as the 'buyer' was 'represented' by that agent. We have spoken to an attorney about this who thinks we do not have a case. This may be as in the State of Connecticut the laws seem to be very complicated regarding real estate broker 'agency'. So much for 'Realtor' code of ethics. BUYER BEWARE!! This is going to cost us thousands of dollars. According to the Attorney, even is we go to court and win, we will lose financially anyway.
Of note: You would be well advised to not to sign ANYTHING before having a very good Attorney review it FIRST!! Also, if you are planning on using a 'Realtor' (member of the 'Association of Realtors' based soley on the fact that they adhere to a 'Code of Ethics', then you would also be well advised to read word for word, and very carefully, their 'Code of Ethics' first, which is freely available from many source's on the net, including the Association of Realtors website. You can then come to your own conclusions. And it wouldn't hurt to call your local board to ask them what they will do for YOU should one of their member's violate the code. You may be surprised.

 

[PghREA]

If the Buyer sought out his own agent to represent him in the sale, then you don't have a case.

 

[UNCLEBUCK]

Yep. We don't. Although in connecticut it would have been different if he had a signed 'buyer' contract with the agent, where he would have paid a commission upon the agent finding him property.

But... all is not lost... yet. I believe that no one, (yes, even doctors and lawyers), are 100% immune from making mistakes. We all know this to be true. Therefore, I have spent countless hours in the last few weeks searching the CT Judicial website for case historys, case law, and real estate contracts. I have found several loopholes, one being that the broker is in fact, not the 'procuring cause' of the sale. This can be proven. Wether or not it is an avenue worth pursuing is another question. Also, I have found that in CT it must be noted on both the Listing Contract, and the buyer agreement, that the possibility of dual agency exists. I have not actually seen the contracts, but have been told this wording does not exist in the contract. Wish me luck. What I didn't mention in the first post is that instead of filing suit against us, or agreeing to arbitration, the Brokers attorney immediately offered a 'settlement'. They have since increased their offer 3 times. I could understand them wanting to settle, rather than going to court because of the costs involved, but they actually backed out on arbitration last minute, when they were the ones that suggested it in the first place. (?) Also note that on the Realtor Association website, they actually suggest that Brokers use Arbitration as they feel their chances are much better using it. I may very well be wrong, but something does look very wrong with this picture. I'll let you know how I make out.

 

[seniorjudge]

We wish you well.

Post back with results.

 

[HomeGuru]

Yep. We don't. Although in connecticut it would have been different if he had a signed 'buyer' contract with the agent, where he would have paid a commission upon the agent finding him property.

But... all is not lost... yet. I believe that no one, (yes, even doctors and lawyers), are 100% immune from making mistakes. We all know this to be true. Therefore, I have spent countless hours in the last few weeks searching the CT Judicial website for case historys, case law, and real estate contracts. I have found several loopholes, one being that the broker is in fact, not the 'procuring cause' of the sale. This can be proven. Wether or not it is an avenue worth pursuing is another question. Also, I have found that in CT it must be noted on both the Listing Contract, and the buyer agreement, that the possibility of dual agency exists. I have not actually seen the contracts, but have been told this wording does not exist in the contract. Wish me luck. What I didn't mention in the first post is that instead of filing suit against us, or agreeing to arbitration, the Brokers attorney immediately offered a 'settlement'. They have since increased their offer 3 times. I could understand them wanting to settle, rather than going to court because of the costs involved, but they actually backed out on arbitration last minute, when they were the ones that suggested it in the first place. (?) Also note that on the Realtor Association website, they actually suggest that Brokers use Arbitration as they feel their chances are much better using it. I may very well be wrong, but something does look very wrong with this picture. I'll let you know how I make out.

**A: there was no mistake made in this case. It was the Buyer who contacted the agent rather than dealing with your estate administrator directly. Therefore a 6 % commission is due upon closing pursuant to the listing contract. Yes, this was a dual agency and said agency should have been disclosed to the Buyer. But even in the absence of full disclosure, the commission is due. Next time , do not post if you do not know the facts as you stated you ave not even seen the contracts.
I am willing to say that there is a dual agency and arbitration clause somewhere in the purchase contract. In this case, the procurring cause need not be proven as the minute the Buyer signed the purchase contract, an agency was created.

 

[seniorjudge]

**A: there was no mistake made in this case. It was the Buyer who contacted the agent rather than dealing with your estate administrator directly. Therefore a 6 % commission is due upon closing pursuant to the listing contract. Yes, this was a dual agency and said agency should have been disclosed to the Buyer. But even in the absence of full disclosure, the commission is due. Next time , do not post if you do not know the facts as you stated you ave not even seen the contracts.
I am willing to say that there is a dual agency and arbitration clause somewhere in the purchase contract. In this case, the procurring cause need not be proven as the minute the Buyer signed the purchase contract, an agency was created.

Offers were taken from several parties, however, the 'excluded' partie's bid was accepted as it was the highest offer.

HG, what (if anything) does this fact have on your answer?

 

[HomeGuru]

Offers were taken from several parties, however, the 'excluded' partie's bid was accepted as it was the highest offer.

HG, what (if anything) does this fact have on your answer?

**A: why do you ask? Do you have a specifc question relative to the transaction?
It is obvious that the offer was accepted.

 

[seniorjudge]

**A: why do you ask? Do you have a specifc question relative to the transaction?
It is obvious that the offer was accepted.

Ah, you are correct.

UNCLEBUCK had nothing to complain about from the get-go because the offer was accepted.

Okay, I am going to drink a cup of coffee and try to wake up.

 

[HomeGuru]

Ah, you are correct.

UNCLEBUCK had nothing to complain about from the get-go because the offer was accepted.

Okay, I am going to drink a cup of coffee and try to wake up.

**A: yes, you need Viagra for the brain.

 

[UNCLEBUCK]

CT

"Next time , do not post if you do not know the facts as you stated you ave not even seen the contracts."

A: OK. I won't. But this time I do have a copy of all contracts in hand.

"UNCLEBUCK had nothing to complain about from the get-go because the offer was accepted"

A: No. In the Listing Contract, which is a standard form used by virtually all Realtor's in our area, it states that commission is due "If the Broker finds a ready, willing, and able Buyer." The highest offer was the listed price. (I apologize, as I should have made this clear in my first post.)
Therefore, whether the bid was accepted or not accepted has nothing to do with it. According to the contract, we would have owed them the commission anyway.

Now then; The contract contains wording that the Seller gives Listing Broker's firm the right to divide 6% commission with other Broker's, including Buyer Brokers. However, there is the addendum which names the buyer as an exclusion. So which applies? If it is the "right to divide 6% commission with other Broker's, including Buyer Brokers" , do you think it may be a good idea for Broker to state on page one of Listing Contract something like: 'Addendum X applies ONLY if Listing Broker presents Buyer'? Or maybe 'All Addendums naming potential Buyers as exclusions are null and void if said Buyer is represented by any Broker other than Listing Broker.'?

"I am willing to say that there is a dual agency and arbitration clause somewhere in the purchase contract."

A: And indeed there is. Altough the arbitration clause has nothing to do with the fact that the Broker backed out of arbitration that they had suggested, which is the point I was making. (We still have the right to force them back into it.)

"In this case, the procurring cause need not be proven as the minute the Buyer signed the purchase contract, an agency was created."

A:Yes an agency was created. But this does not necessarily mean the Listing Broker that 'closed' the deal is entitled to the commission. In a dispute a few years back, The CT State Supreme Court upheld that all commission monies were due a 'broker X', even though 'broker Y' closed the deal. Agree or disagree, that was the courts opinion. And realistically speaking, the only one that counts.
Previous to our listing contract with Broker, the property was listed with a different Broker. The previous Broker actually produced the Buyer first, but obviously did not close the deal. I'm contemplating contacting the first Broker to see if this is an avenue worth pursuing for them. It isn't for me. If they did pursue it and were successful, the financial gain to me would equal zero. Psychological gain of seeing current Broker get a 'spanking'? Priceless.

 

[jnazareno]

Violation

In any contract, Real Estate or None Real Estate , please read everyword
of that contract. as a Realtor I am suprised 90% of my clients asked me not to explain or don't even pay attaention what what I am telling them regarding Real Estate transaction ( but I explain everthing anyway and do asked
for them to listen ) not every person on this planet are equal, some are dishonest and some are honest, so read and please do ask question if you don't understand the terms of the contract. in this case , YES you have to pay the listing agent the 6% since you probably didn't read the contract
word by word . remember if what ever you spoke or agreed with your realtor
verbally is not a legal until it is put in writing. unless you can prove in court that he misled you then pay the 6% or you will waste $$$.

 

[UNCLEBUCK]

"In any contract, Real Estate or None Real Estate , please read everyword
of that contract. as a Realtor I am suprised 90% of my clients asked me not to explain or don't even pay attaention what what I am telling them regarding Real Estate transaction ( but I explain everthing anyway and do asked
for them to listen ) not every person on this planet are equal, some are dishonest and some are honest, so read and please do ask question if you don't understand the terms of the contract. in this case , YES you have to pay the listing agent the 6% since you probably didn't read the contract
word by word . remember if what ever you spoke or agreed with your realtor
verbally is not a legal until it is put in writing. unless you can prove in court that he misled you then pay the 6% or you will waste $$$."

jnazareno,

Thanks for your post. I think it is commendable and wise that you expain everything as it protects buyers/sellers, as well as yourself. As mentioned in a previous post, I did not handle this transaction personally. But I do have a copy of all documents in hand now. I have read, and re-read all of them several times now. Here is the one question that I just can't resolve. Why does the wording regarding commission payment take precedance over the exclusions? There is absolutely no reference to this in any of the documents. ie: I have looked into this and found that the wording would have been identical even if there were no addendums. So wouldn't it be wise for the local Board of Realtor's to include on page one of the Listing Agreement, a generic phrase noting this? In any case, thanks again. It's insightful to hear the point of view of another Realtor.

 

[seniorjudge]

Q: Why does the wording regarding commission payment take precedance over the exclusions?

A: Because you agreed to it.

 

[HomeGuru]

CT

"Next time , do not post if you do not know the facts as you stated you ave not even seen the contracts."

A: OK. I won't. But this time I do have a copy of all contracts in hand.

"UNCLEBUCK had nothing to complain about from the get-go because the offer was accepted"

A: No. In the Listing Contract, which is a standard form used by virtually all Realtor's in our area, it states that commission is due "If the Broker finds a ready, willing, and able Buyer." The highest offer was the listed price. (I apologize, as I should have made this clear in my first post.)
Therefore, whether the bid was accepted or not accepted has nothing to do with it. According to the contract, we would have owed them the commission anyway.

**A: NOT TRUE and you have no idea what the hell you are talking about. There is no law requiring a commission to be paid if an offer at the list price is presented.
Please stop making things up. You have no knowledge of real estate contract law.
***********

Now then; The contract contains wording that the Seller gives Listing Broker's firm the right to divide 6% commission with other Broker's, including Buyer Brokers. However, there is the addendum which names the buyer as an exclusion. So which applies? If it is the "right to divide 6% commission with other Broker's, including Buyer Brokers" , do you think it may be a good idea for Broker to state on page one of Listing Contract something like: 'Addendum X applies ONLY if Listing Broker presents Buyer'? Or maybe 'All Addendums naming potential Buyers as exclusions are null and void if said Buyer is represented by any Broker other than Listing Broker.'?

"I am willing to say that there is a dual agency and arbitration clause somewhere in the purchase contract."

A: And indeed there is. Altough the arbitration clause has nothing to do with the fact that the Broker backed out of arbitration that they had suggested, which is the point I was making. (We still have the right to force them back into it.)

"In this case, the procurring cause need not be proven as the minute the Buyer signed the purchase contract, an agency was created."

A:Yes an agency was created. But this does not necessarily mean the Listing Broker that 'closed' the deal is entitled to the commission. In a dispute a few years back, The CT State Supreme Court upheld that all commission monies were due a 'broker X', even though 'broker Y' closed the deal. Agree or disagree, that was the courts opinion. And realistically speaking, the only one that counts.
Previous to our listing contract with Broker, the property was listed with a different Broker. The previous Broker actually produced the Buyer first, but obviously did not close the deal. I'm contemplating contacting the first Broker to see if this is an avenue worth pursuing for them. It isn't for me. If they did pursue it and were successful, the financial gain to me would equal zero. Psychological gain of seeing current Broker get a 'spanking'? Priceless.

**A: see above.

 

[UNCLEBUCK]

A: Because you agreed to it.

I could just as easily say the exclusion applies because the broker agreed to it.

In any case, I have a question, the answer to which would shed a lot of light on where the Broker is with this. Let's say you're a Realtor. You believe you've done absolutely nothing wrong. And your client refuses to pay you. He's owe's you about $20K. How much would you offer to settle, as opposed to going to court? The reason I am asking is that they have made us several offers to settle this. I wan't to know if they are offering this amount to save them the cost / headache of a trial, or if they think we do in fact have a case. My line of thinking right now is that a lower settlement offer means they'll eat the loss just to get rid of us; higher means they think that there is in fact a chance they may lose. Reasonable line of thinking? Or no? And what amount of $ means what? I do understand there's a lot of 'grey' here. I'm just looking for round figures. (I purposely didn't divulge what the offers were simply because I don't want to color anyones opinion.)